"This goes far beyond renderings and schematics. This is about the health of our city's economy," Rosamilia said.

"We have looked at the project since the first day I came into office, and it is hard to overstate the importance of this entire initiative," Rosamilia said.

Requests for proposals are expected to be solicited by the city in December.

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The city never sold the 2.1-acre property to Troy City Center LLC — the Nigro and Richman partnership — for the $1 million agreed upon. The partnership was selected in May 2011 by former Mayor Harry Tutunjian's administration as the preferred developer in May 2011. The proposal beat out competing bids from Columbia Development/BBL Construction and Judge Development.

No construction was undertaken in the last 18 months. The empty riverfront parcel is being used for parking, which has raised worries among some city leaders and residents that they may be left with an empty parcel in the heart of downtown for years as happened before the Atrium at Third and Broadway was built.

"If the bid is taken seriously by the developers in the region we will not have a hole in the ground," said City Council President Lynn Kopka.

City leaders want to see market-rate housing built on the prime downtown-riverfront site and not large numbers of income-based rental apartments. They are counting on the strengthening housing market to draw in more companies interested in acquiring the property.

Rosamilia's administration was disturbed to learn that the partnership's project for 106 apartments and retail space in two seven-story buildings called for setting aside 60 percent of the apartments for low-income and moderate-income renters.

The Richman Group specialized in undertaking these type of projects. The developers never submitted a proposal to the state for funding for the housing.

John Nigro of Nigro Companies said in a statement that he welcomed the city's decision to seek new proposals for developing the site.

Rosamilia was taking the right approach in seeking new alternatives given the changes in the marketplace since 2010, Nigro said.

"We believe strongly in the future of Downtown Troy and look forward to the opportunity to participate in its future," Nigro said.

City officials believe that given the increased development interest in downtown, now is the time to go back out for proposals. They point to Sonny Bonacio's work at the Keenan Building on Broadway and his recent purchase of the Dauchy and River Triangle buildings from the city as well as Sam Judge's Judge Development Co. investment in properties along River Street as evidence of this.

"What happens at that site will go a long way toward determining the future of Downtown Troy and Rensselaer County," Rosamilia said. "I fully expect a great deal of interest and look forward to a robust response to our call for proposals."